You're looking for a yes or no answer. Without all the facts, it is impossible to give one. Here are some things to consider:
(1) The purpose of a corporation is to limit the liability. Usually a former employee can only sue the company for his owed salary, but not the owner personally.
(2) There are exceptions to the limited liability. If the owner treated the old company as his personal business, for example taking money out of the company for his personal use, he may be held personally liable.
(3) Check out the relationship between the old company and the new company. If the owner transfers the business from the old company to the new company and leaves behind all the debt, it is possible to sue the new company because the two companies are really the same thing. The old one is simply used as a vehicle to avoid debt.
Your experience with the lawyers is not unusual. Litigation is not as easy as it looks on TV. One possibility is to use the small claims court to sue the owner personally or the new company if you can prove the exceptions mentioned above. If you can get $7500 from the small claims court (for California, different states vary) out of the total amount owed, you may end up collecting the same amount as going through litigation.
Also keep in mind the possibility of settlement. If you can sue the new company, the owner may be willing to settle for a reduced amount because otherwise his new company would be handicapped.
Of course you are the one who makes the decision. These are just some things you may consider.
(1) The purpose of a corporation is to limit the liability. Usually a former employee can only sue the company for his owed salary, but not the owner personally.
(2) There are exceptions to the limited liability. If the owner treated the old company as his personal business, for example taking money out of the company for his personal use, he may be held personally liable.
(3) Check out the relationship between the old company and the new company. If the owner transfers the business from the old company to the new company and leaves behind all the debt, it is possible to sue the new company because the two companies are really the same thing. The old one is simply used as a vehicle to avoid debt.
Your experience with the lawyers is not unusual. Litigation is not as easy as it looks on TV. One possibility is to use the small claims court to sue the owner personally or the new company if you can prove the exceptions mentioned above. If you can get $7500 from the small claims court (for California, different states vary) out of the total amount owed, you may end up collecting the same amount as going through litigation.
Also keep in mind the possibility of settlement. If you can sue the new company, the owner may be willing to settle for a reduced amount because otherwise his new company would be handicapped.
Of course you are the one who makes the decision. These are just some things you may consider.
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